Diebold Inc. to pay more than $48 million to settle SEC allegations

ATM maker Diebold Inc. has agreed to pay more than $48 million to settle charges related to alleged violations of the Foreign Corrupt Practices Act.
According to a news release from the U.S. Securities and Exchange Commission, the SEC alleges that subsidiaries of Diebold in China and Indonesia spent $1.8 million on “improper gifts” designed to influence the purchasing decisions of senior officials at government-owned banks between 2005 and 2010.
Diebold's agreement would settle the charges from the commission and resolve a parallel criminal matter from the U.S. Department of Justice, according to the news release.
Mike Jacobsen, a spokesman for Diebold, said the settlement agreement is an important step for the company to move forward. It was vital for the company to recognize these issues and accept responsibility, he said, adding that Diebold's commitment to compliance and ethics has been communicated with the entire company.
The proposed settlement was disclosed in Diebold's August earnings report.
The majority of the alleged bribes — $1.6 million of the $1.8 million — went to officials at government banks in China. These alleged gifts included free trips to at least two dozen tourist destinations in the United States and Europe, including the Grand Canyon, Disneyland, Las Vegas, New York City, Paris, Amsterdam and Rome.
Those expenses were falsely recorded by Diebold as legitimate training costs, according to the SEC news release. The subsidiary in China also allegedly gave annual cash gifts to “dozens of government bank officials.” These gifts supposedly ranged from less than $100 to more than $600.
The commission further alleged that Diebold falsified books and records using “phony service contracts” to hide about $1.2 million of bribes that were paid to employees at privately owned banks in Russia. This allegedly took place from 2005 to 2008.